Now that Inflation is Here…

14 May

Now that Inflation is Here…

A New York Times headline the other day read, “Inflation Is Here. What Now?”  

It is almost funny the lengths the writer went to in order to avoid talking about the Federal Reserve’s massive money-printing experiments.

We even word-searched the article to make sure we did not miss it.  He came closest to saying something about it with this line: “Low-interest rate policies from the Fed have made financing cheap.”

But we expect nothing better from the New York Times

Well, what now?

At least a similar article in the Wall Street Journal included this: “… it is true that gold, historically, has performed well when inflation is high, holding on to its value even in countries where inflation soared into double-digits….”

In tracking the news coverage of the jumps in the consumer and producer price indices, we note with no surprise of our own that Fed officials and news writers repeatedly referred the news as “surprising.”

Well, as our readers will no doubt be aware, it was not surprising to us.  That is because we watched Fed assets (digitally printed money of no tangible value) swell by $4 trillion dollars over a year and a half.  And we reported on it as grew.

All that money must go somewhere.

Our own answer to “now what?” is to warn our friends and clients about stock valuations that are already in the nosebleed section.  We are old enough to remember what happened with stock in the last inflation decade, the 1970s.

We are not the only ones noting eerie pre-figurations of the stagflation decade.  That is because the inflation numbers were not the only economic news.  The April jobs numbers were a calamity, too, coming in at a mere fraction of expectations.  Columnist Pat Buchanan, an advisor to three presidents, writes, “April’s combination of inflation and near-stagnant job growth recalls the ‘stagflation’ of the Jimmy Carter years, which led to the Democratic rout of 1980 at the hands of Ronald Reagan.”

“And while we may not be suffering from stagflation just yet, the present symptoms in the U.S. economy are certainly consistent with it.”

History may not repeat, but it rhymes.  If this decade is going to sound a lot like the stagflation decade, you will want to remember that the big winners in the 1970s were gold and silver.

That is what happens when the currency is being debauched.  We advise you to speak with a Republic Monetary Exchange gold and silver professional and make sure you are protected from America’s repeat of monetary policies that have failed over and over throughout history.